Standard deviation of the damage, Econometrics

Assignment Help:

In a year, weather can impose storm damage to a home. From year to year the damage is random. Let Y be the dollar value of damage in a given year. Assume that 95% of the year's Y=$1,000, and 5% of the years, Y=$15,000.

a. Calculate the mean and standard deviation of the damage in any year.

b. Consider an 'insurance pool' of 100 sufficiently dispersed homes, which implies the damage to dissimilar homes can be viewed as separately distributed as random variables. If ? is the average damage to those 100 homes in a year, (i) what is the expected value of the average damage? (ii) What is the probability that ? exceeds $2000?

 


Related Discussions:- Standard deviation of the damage

F testing, given the formula for f statistic prove that by using the f stat...

given the formula for f statistic prove that by using the f statistic you can derive this formula

Differentiate between linear and log-linear model, Problem: (a) Differe...

Problem: (a) Differentiate between linear and log-linear model. (b) Distinguish between type I and type II errors. (c) (i) A bulb manufacturer claims that its bulbs last

Estimate the earn average , (a) Estimate how much more or less workers on a...

(a) Estimate how much more or less workers on average earn when they work for government as opposed to private sector, holding their characteristics constant. Interpret the finding

Question about service, do you write assignment or just help write assignme...

do you write assignment or just help write assignments

Identification problem, #question.elaborate the different methods for the e...

#question.elaborate the different methods for the estimation of simultaneous equation model in case of exact and over identification?

Economic development, what are factors contributing to the long run trend i...

what are factors contributing to the long run trend interms of trade of developing countries?

Calculate the after-tax operating cash flows, Your firm will produce widget...

Your firm will produce widgets for the next 10 years (starting at t=1). Annual revenue from selling widgets is $20,000. Production requires an initial outlay (at t=0) for machin

Ac, what is ac that mines average cost,

what is ac that mines average cost,

Hetroscedasticity, hypothetical data on consumption expenditure ($) and inc...

hypothetical data on consumption expenditure ($) and income ($) is given in the table x Y 80 55 100 65 85 70 110 80 120 79 115 84

Replication of the work of a published paper, Hi I am currently working on ...

Hi I am currently working on my econometrics coursework which is to replicate a published paper. I was given the same data set as the paper and suppose to get the same answer as th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd